Richard Esposito: Bailing out' a sinking ship

Tuesday

National financial disasters have a way of getting people's attention.

National financial disasters have a way of getting people's attention.

During a recent evening stroll with my wife, our conversation turned to economics, the home mortgage crisis, and the subsequent failure of several of the largest banks in the nation.

"Well, what did he recommend?" she asked.

"Who?" I replied. "President Bush? John McCain? The Messiah?"

"Our financial guy, that's who!" she said, as we picked up the pace in what was supposed to be a casual walk.

Knowing I conferred with our financial guru earlier in the day, she eagerly wanted to hear all the answers to our financial questions.

"So what do we do with our 401(k)?" she asked.

"Just hold tight," I replied. "We're close to the bottom of the trough, and the stock market should level off after Congress passes a bailout plan."

Ours was a conversation millions of families across the nation were having with the stock market reeling, banks closing, and 401(k) retirement accounts dropping in value with each monthly statement. Now is the time to get your personal finances in order.

Cut expenses, reduce debt, and save, save, save are the orders of the day. So, as my wife and I took stock in our own household finance situation, I couldn't help but wonder if others were doing the same.

Despite reassurances from our legislators (and the ashen face of my stockbroker), why do I still have the feeling we're rearranging the deck chairs on the Titanic? Our economy is sailing into uncharted waters, and that big white thing up ahead looks kind of daunting. And for those of you who believe the glass is half full rather than half empty -- remember two thirds of the iceberg lies beneath the surface.

Like the passengers sailing on the ill-fated Titanic, your survival rests on which deck of the ship you happen to be on. Well-heeled passengers on the upper decks have plenty of resources to see them through this crisis and they get first crack at the lifeboats. Some will move money off-shore or switch over to safer investments, while others will take advantage of these dire times and invest.

It's similar to what happens in the classic movie "It's a Wonderful Life," when Ernie the cab driver excitedly turns and tells George Bailey and his new bride Mary: "I've never actually seen one, but that has all the makings of a run on the bank!" Later, we learn the hard truth when "Old Man" Potter buys up half the town and offers Building & Loan investors pennies on the dollar.

Other passengers farther below deck may have difficulty getting to the lifeboats. Some may lose their homes, savings, and retirement funds.

They may have a difficult time getting their kids off to college or keeping their jobs.

Then, of course, there's the dregs of humanity toiling down in the boiler room far below the water line. With water up to their knees and nowhere to turn, they'll likely drown.

Politicians and news anchors are comparing today's crisis to that of the Great Depression. "At no time since the Great Depression have we experienced anything like this," they chime. But here's the rub. How many of us living today actually experienced the Great Depression? All we know is what our parents and grandparents told us.

Anyone selling apples on the street corner? Where are the droves of people standing in bread lines? The Depression era is far removed from the age of cell phones, high speed Internet and I-Pod technology. Let's face it. The gas lines we're experiencing today remind us more of the Jimmy Carter years than FDR and his New Deal.

Most generation X, Y and Z kids today don't even know what the Great Depression was, let alone the Dust Bowl, Vietnam or the Beatles. They don't know what it means to lose a business, farm, home or life's savings.

To many of them, misplacing their cell phone is a fate worse than death.

With a government bailout soon in hand, we'll all rest easy. Besides, it was Congress that got us into this mess and now Congress will bail us out (using our tax dollars, of course).

And look on the bright side; once this economic mess is cleaned up, our trusted politicians can again focus on issues that matter -- like Social Security.

FDR told the nation at the time, "We have nothing to fear but fear itself." But, today, I'm reminded more of the words of Mark Twain, who said: "We have the best government that money can buy."

Richard Esposito is publisher of The Oak Ridger and can be contacted at (865) 220-5510 or by e-mail at richard.esposito@oakridger.com.

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